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Will The Trade Desk Bankrupt SSPs?

Welcome to the wild and ever-wacky world of programmatic advertising, where the rules change as often as the weather in the British Isles. This month, we’ve got a front-row seat to what could be the industry’s next seismic shift: The Trade Desk is shaking things up by refusing to let publisher- or SSP-dictated floor prices dictate their bids anymore. 

Yes, you read that correctly. The Trade Desk is going rogue, sending bids on behalf of clients even when those bids are wading knee-deep in the price range that publishers and SSPs would rather keep their well-heeled shoes far away from.

Now, before you imagine The Trade Desk as a corporate supervillain, complete with a cape and a diabolical laugh, let’s hear their side of the story. According to the Trade Desk’s Vice President of Inventory Development, Will Doherty, this move is as harmless as a kitten in a cardboard box. Doherty insists that they’re not changing how they set their bids; they’re just going to flood the market with more bids. Think of it as unleashing a stampede of bids to let publishers and SSPs know that there’s a hidden treasure trove of demand out there for inventory they’ve been undervaluing.

So, what’s the big deal, right? Well, here’s where it gets spicy. Some industry experts are convinced that this seemingly innocuous move could put immense pressure on publishers and SSPs to do the unthinkable: lower their CPM (Cost Per Mille) ceilings to accommodate these lower bids. In other words, it’s like telling your favorite restaurant that you’d love to pay half the price for their signature dish, and if they don’t agree, you’ll just go eat elsewhere.

The jury’s still out on how publishers will fare in this high-stakes poker game, whether they’ll emerge as the winners, losers, or just end up breaking even. But what’s clear is that this move by The Trade Desk is creating ripples in the otherwise serene programmatic pond.

Now, let’s take a moment to address a sore point that’s plagued the programmatic landscape for years: transparency. Publishers have long grumbled about missing out on bids because their floor prices were too high for some advertisers’ tastes. Imagine going through life blissfully unaware of all the secret admirers you never knew you had. It’s like receiving love letters you never read. Doherty hits the nail on the head when he says, “If there’s any demand below that line, you’ll just never see it. You’ll never know it exists.”

The Trade Desk’s move, however, brings a glimmer of hope to the transparency conundrum. By sending bids that dive below set floor prices, publishers finally get to see what some advertisers think their inventory is worth, even if it’s less than they expected. It’s like receiving a brutally honest critique of your cooking from Gordon Ramsay – painful, but ultimately enlightening. Doherty adds, “We’re not changing our bids … [but] going forward, [publishers] at least have the data to understand all the bids we never would have sent you anyway.”

Of course, it’s not all rainbows and unicorns. Sharing this newfound treasure trove of data from The Trade Desk is, to some extent, the responsibility of SSPs. It’s something Justin Wohl, CRO of Salon, TV Tropes, and Snopes, believes publishers should advocate for more within the programmatic supply chain. After all, knowledge is power, and in the world of programmatic advertising, data is king.

Now, let’s talk about the elephant in the room, or in this case, the Trade Desk in the room. David Spiegel, ever the contrarian, has an intriguing theory. He thinks The Trade Desk is sitting pretty, holding a golden ticket to potentially bankrupt most SSPs. 

How, you ask? Well, it’s a three-step plan: reduce or eliminate publisher fees, launch a platform for publishers to sign up, and develop templates that advertisers can use. Essentially, it’s like The Trade Desk saying, “Hey, SSPs, thanks for playing, but we’ll take it from here.”

Sure, it sounds like a daunting task, but it’s not exactly rocket science. The Trade Desk seems to be sending a clear message: “We’re here to disrupt, not be disrupted.” While some SSPs, like Magnite, are fighting back by building their own DSPs, Spiegel argues that it’s like bringing a knife to a laser gunfight. Building a robust, competitive DSP is a complex and expensive endeavor, one that might not stack up against the colossal DSP giants.

Media buyers, the ultimate decision-makers in this opera of dollars and data, now face a choice. Do they stick with five smaller SSPs, each equipped with their less advanced DSPs and serving their limited supply?

 Or do they opt for one or two massive, technologically sophisticated DSPs with access to a treasure trove of supply? The answer, it seems, is written on the wall.

As we peer into the crystal ball of programmatic advertising, one thing’s for sure: the game is afoot, and the future is uncertain. 

Will The Trade Desk’s bold gambit lead to a more transparent, efficient ecosystem, or will it unleash unforeseen consequences upon us? 

Only time will tell, my friends, but one thing’s for sure – the programmatic landscape is far from stagnant, and change, as always, is the only constant.

Pesach Lattin
Pesach Lattinhttp://www.adotat.com
Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pesach Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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